Present value of future cash flows is divided by an initial cost of project to calculate:
A. Negative index
B. Exchange index
C. Project index
D. Profitability index
Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as:
A. Valued relationship
B. Economic relationship
C. Direct relationship
D. Inverse relationship
Profitability index in capital budgeting is used for:
A. Negative projects
B. Relative projects
C. Evaluate projects
D. Earned projects
In mutually exclusive projects, project which is selected for comparison with others must have:
A. Higher net present value
B. Lower net present value
C. Zero net present value
D. All of above
A project whose cash flows are more than capital invested for rate of return then net present value will be:
A. Positive
B. Independent
C. Negative
D. Zero
An equity multiplier is multiplied to return on assets to calculate:
A. Return on assets
B. Return on multiplier
C. Return on turnover
D. Return on stock
Process of comparing company results with other leading firms is considered as:
A. Comparison
B. Analysis
C. Bench marking
D. Return analysis
High price to earning ratio shows company’s:
A. Low dividends paid
B. High risk prospect
C. High growth prospect
D. High marginal rate
Price earning ratio and price by cash flow ratio are classified as:
A. Marginal ratios
B. Equity ratios
C. Return ratios
D. Market value ratios
In capital budgeting, term of bond which has great sensitivity to interest rates is:
A. Long-term bonds
B. Short-term bonds
C. Internal term bonds
D. External term bonds
